Survivorship bias
Looking only at the winners that are still around and forgetting the losers that disappeared.
In plain English
If you test a strategy only on companies that exist today, you have quietly removed every company that went bust. Your results look better than reality.
Uncle Gary explains
Uncle Gary says every restaurant on Main Street is great. He is right: the bad ones closed years ago, so he only ever sees the survivors.
Why it matters for your money
Our data covers stocks listed today, so it has this problem too. It makes buying look a bit better than it really was, for the strategy and the control group alike.
Where we tested it
- Does the Golden Cross Work? We Tested 72 Strategies
- Does Buying the Dip Work? We Checked Which Dips
- Does Volume Confirm the Trend? Sometimes It Contradicts It
- Are Online Reviews Trustworthy? Five Stars From Seven Reviews
- Lesson 10: How to Lie With Statistics (So You Can Catch It)
- Should You Buy Stocks After Good Earnings? Post-Earnings Drift, Tested
- Are Employee Surveys Really Anonymous? The One That Needed Your Login
- Is Fantasy Football Luck or Skill? Kevin's Three Titles, Tested
- Do Lottery Winners Really Go Broke? The 70% Statistic Nobody Can Find
- Do Trading Strategies Work? Here Are All 430 Versions We Tested
Related terms
All glossary terms. Educational content, not financial advice.